Brazil’s public debt rises 2.01% in May, interest rates reach 5-year highs

Brazil’s public debt rises 2.01% in May, interest rates reach 5-year highs

© Reuters. People walk in front the Central Bank headquarters building in Brasilia, Brazil March 22, 2022. REUTERS/Adriano Machado

BRASILIA (Reuters) – Brazil’s federal public debt rose 2.01% in May from the month before, with the average costs of domestic debt issuance jumping to the highest level in five years amid high inflation, the Treasury said on Tuesday.

The debt stock reached 5.702 trillion reais ($1.08 trillion) in May after it had increased 0.45% in April over the previous month. April data had not yet been published due to a protest for higher salaries by Treasury employees.

According to the Treasury, the average interest rate on the domestic federal debt grew to 11.69% against 11.29% in April, its highest level since May 2017, amid appreciation in inflation-linked and interest rate bonds.

The Brazilian central bank has already raised its key interest rate to 13.25% from a record low of 2% in March last year, indicating there is room for another hike in its battle to tame double-digit inflation in Latin America’s largest economy.

($1 = 5.2557 reais)

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